[Federal Register Volume 74, Number 150 (Thursday, August 6, 2009)]
[Proposed Rules]
[Pages 39230-39240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18538]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 /
Proposed Rules
[[Page 39230]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 983
[Doc. No. AO-FV-08-0147; AMS-FV-08-0051; FV08-983-1]
Pistachios Grown in California; Secretary's Decision and
Referendum Order on Proposed Amendment of Marketing Order No. 983
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and referendum order.
-----------------------------------------------------------------------
SUMMARY: This decision proposes amendments to Marketing Agreement and
Order No. 983 (order), which regulates the handling of pistachios grown
in California, and provides growers with the opportunity to vote in a
referendum to determine if they favor the changes. The amendments are
based on proposals by the Administrative Committee for Pistachios
(Committee), which is responsible for local administration of the
order. These amendments would: Expand the production area covered under
the order to include Arizona and New Mexico in addition to California;
authorize the Committee to reimburse handlers for a portion of their
inspection and certification costs in certain situations; authorize the
Committee to recommend research projects; modify existing order
authorities concerning aflatoxin and quality regulations; modify the
authority for interhandler transfers of order obligations; redesignate
several sections of the order; remove previously suspended order
provisions, and make other related changes. The amendments are intended
to improve the operation and functioning of the marketing order
program.
DATES: The referendum will be conducted from August 10 through August
22, 2009. The representative period for the purpose of the referendum
is September 1, 2008, through July 31, 2009.
FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202
Monterey Street, Suite 102-B, Fresno, California 93721; Telephone:
(559) 487-5110, Fax: (559) 487-5906, or e-mail:
[email protected]; or Laurel May, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237;
Telephone: (202) 720-1509, Fax: (202) 720-8938, or e-mail:
[email protected].
Small businesses may request information on this proceeding by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202)
720-8938, e-mail: [email protected].
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued on July 15, 2008, and published in the July 18, 2008,
issue of the Federal Register (73 FR 41298), and a Recommended Decision
issued on April 29 and published in the May 5, 2009, issue of the
Federal Register (74 FR 20630).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Preliminary Statement
The proposed amendments are based on the record of a public hearing
held on July 29 and 30, 2008, in Fresno, California, to consider such
amendments to the order. The hearing was held pursuant to the
provisions of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act'', and
the applicable rules of practice and procedure governing the
formulation of marketing agreements and orders (7 CFR Part 900).
The Notice of Hearing was published in the Federal Register on July
18, 2008 (73 FR 41298), and contained amendment proposals submitted by
the Committee.
The amendments included in this decision would add new sections to
the order which would result in numerical redesignation of several
sections of the order. The redesignated sections would allow the
related provisions to be grouped together in the order. The amendments
included in this decision would:
1. Expand the production area to include the States of Arizona and
New Mexico. The production area covered under the order is currently
limited to the State of California. This proposal would revise existing
Sec. 983.26, Production area, and redesignate it as Sec. 983.25. It
would also result in corresponding changes being made to existing Sec.
983.11, Districts; Sec. 983.21, Part and subpart; and existing Sec.
983.32, Establishment and membership. Existing sections 983.21 and
983.32 would also be redesignated as Sec. 983.20 and Sec. 983.41,
respectively.
2. Authorize the Committee to reimburse handlers for travel and
shipping costs related to aflatoxin inspection, under certain
circumstances. This proposal would amend existing Sec. 983.44,
Inspection, certification and identification, and redesignate it as
Sec. 983.56.
3. Add a new Sec. 983.46, Research, that would authorize the
Committee to engage in research projects with the approval of USDA.
This proposed amendment would also require corresponding changes to
existing Sec. 983.34, Procedure, to establish voting requirements for
Committee recommendations concerning research. It would also require
corresponding changes to existing Sec. 983.46, Modification or
suspension of regulations, and Sec. 983.54, Contributions. The
existing Sec. 983.34, Sec. 983.46, and Sec. 983.54 would also be
redesignated as Sec. 983.43, Sec. 983.59, and Sec. 983.72,
respectively.
4. Provide broad authority for aflatoxin regulations by revising
existing Sec. 983.38, Aflatoxin levels, and redesignating it as Sec.
983.50. This proposal would also require corresponding changes to
existing Sec. 983.40, and redesignating that section as Sec. 983.52.
It would also require corresponding changes to Sec. 983.1, Accredited
laboratory.
5. Provide broad authority for quality regulations by revising
existing Sec. 983.39, Minimum quality levels, and
[[Page 39231]]
redesignating it as Sec. 983.51. It would also remove provisions from
that section concerning specific quality regulations that are currently
suspended. This amendment would also require corresponding changes by
removing currently suspended language in Sec. 983.6, Assessed weight;
revising Sec. 983.7, Certified pistachios; removing existing Sec.
983.19, Minimum quality requirements and Sec. 983.20, Minimum quality
certificate; revising existing Sec. 983.31, Shelled pistachios;
revising existing Sec. 983.41, Testing of minimal quantities, and
removing currently suspended language in that section; revising
existing Sec. 983.42, Commingling; and revising existing Sec. 983.45,
Substandard pistachios. Sections 983.31, 983.41, 983.42, and 983.45
would be redesignated as sections 983.30, 983.53, 983.54, and 983.57,
respectively.
6. Add a new Sec. 983.58, Interhandler Transfers. This proposal
would modify existing authority under the order by expanding the range
of marketing order obligations that may be transferred between handlers
when pistachios are transferred between handlers. This proposal would
require a corresponding change to existing Sec. 983.53, Assessments,
and would redesignate Sec. 983.53 as Sec. 983.71.
7. As a result of the proposed amendments and corresponding changes
to the order summarized above, numerous administrative changes to the
order would also be required. Such changes include numerical
redesignations to several sections of the order, changes to cross
references of section numbers in regulatory text as a result of the
numerical redesignations, and removal of obsolete provisions. The title
of order would be revised to include the States of Arizona and New
Mexico. In addition, a change would be made to amend existing Sec.
983.70 and redesignate it as Sec. 983.92.
In addition to the proposed amendments to the order, AMS proposed
to make any such additional changes as may be necessary to the order to
conform to any amendment that may be adopted. To the extent necessary,
conforming changes have been made to the amendments. These conforming
changes have been identified in the above list of proposed amendments.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of AMS on April 29, 2009, issued a
Recommended Decision published in the Federal Register on May 5, 2009
(74 FR 20630). An opportunity to file written exceptions was provided
through June 4, 2009. None were received.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601-612) (RFA), AMS has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit.
Small agricultural service firms, which include handlers regulated
under the order, have been defined by the Small Business Administration
(SBA) (13 CFR 121.201) as those having annual receipts of less than
$7,000,000. Small agricultural producers have been defined as those
with annual receipts of less than $750,000.
There are approximately 24 handlers and approximately 800 producers
of pistachios in the State of California. It is estimated that
approximately 50 percent of the processing handlers had annual receipts
of less than $7,000,000, according to information presented at the
hearing. In addition, based on the number of producers, the size of the
2007 crop, and the average producer price per pound data reported by
the National Agricultural Statistics Service (NASS), the average
producer revenue for the 2007 crop was $702,000. It is estimated that
85% of the producers in California produced less than $750,000 worth of
pistachios and would thus be considered small businesses according to
the SBA definition.
Based on information presented at the hearing, it is estimated that
there are approximately 40 to 50 growers of pistachios in Arizona and
approximately 30 growers in New Mexico. It is also estimated that there
are 2 handlers in Arizona and 3 handlers in New Mexico. Although no
official data is available, based on hearing testimony it is estimated
that the majority of producers in Arizona and New Mexico are small
businesses according to SBA's definition. It is also estimated that all
of the handlers in New Mexico are small businesses and one of the
handlers in Arizona is a small business.
California accounts for the vast majority of pistachio acreage and
production in the U.S. According to data from the National Agricultural
Statistics Service (NASS), California's total acreage in 2007 was
reported at 176,400 acres. While no 2007 acreage data is available from
NASS for Arizona and New Mexico, in 2006, Arizona acreage was reported
at 2,500 acres while New Mexico acreage was reported at 1,350 acres in
2002. Two witnesses from New Mexico testified that they estimate
acreage in New Mexico to be about 450 acres in 2007. Pistachios are
also grown in small quantities in Texas, Utah, and Nevada. However,
witnesses testified that pistachios produced in those States are
considered to be the result of hobby farming and are not commercially
significant in volume. California, Arizona, and New Mexico account for
over 99.99 percent of domestic pistachio production and essentially all
of the production used for commercial purposes, according to the
record.
The order regulating the handling of pistachios grown in the State
of California was established in 2004. The primary feature of the order
is a quality provision that requires pistachios to be sampled and
tested for aflatoxin prior to shipment to domestic markets. Such
shipments of pistachios may not exceed a tolerance level for aflatoxin.
Information collection and dissemination is also conducted under the
order. The program is funded through assessments on handlers according
to the quantity of pistachios handled. The order is administered by an
industry committee of handlers and growers, and is designed to support
both large and small pistachio handlers and growers. Committee meetings
where regulatory recommendations and other decisions are made are open
to the public. All members are able to participate in Committee
deliberations, and each Committee member has an equal vote. Others in
attendance at meetings are also allowed to express their views.
The Committee met on March 6, 2008, and requested that USDA conduct
a public hearing to consider proposed amendments to the order. USDA
reviewed the request and determined to proceed to a hearing. A hearing
was conducted on July 29 and 30, 2008, in Fresno, California. The
Committee's meeting and the hearing were both open to the public and
all that attended were able to participate and express their views.
The proposed amendments recommended by the Committee would: Expand
the production area to include the States of Arizona and New Mexico;
authorize the Committee to reimburse handlers for certain inspection
costs;
[[Page 39232]]
authorize research activities under the order; provide broad authority
for aflatoxin regulation under the order, provide broad authority for
quality regulation under the order; provide authority for interhandler
transfer of marketing order obligations; and make corresponding
administrative changes to the order as a result of the aforementioned
proposed changes.
The proposed amendments are intended to improve the operation and
functioning of the marketing order program. Record evidence indicates
that the proposals are intended to benefit all producers and handlers
under the order, regardless of size. All grower and handler witnesses
at the hearing supported the proposed amendments and while
acknowledging the additional cost implications, they stated that they
expected the benefits to outweigh the costs.
A description of the proposed amendments and their anticipated
economic impact on small and large entities is discussed below.
Evaluation of the Potential Economic Impacts of the Proposed Amendments
The key economic issues to examine in considering the proposed
amendments to the marketing order are the benefits and costs to growers
and handlers of the proposed expansion of the production area and the
consequences of that expansion. The most significant change in terms of
its potentially significant and immediate impact is the fact that if
the production area is expanded to include Arizona and New Mexico, the
pistachio handlers in those two States would become regulated under the
order and would have to meet the same aflatoxin certification
requirements that apply to California handlers.
Aflatoxin Requirements
California handlers currently must have all pistachio lots destined
for the domestic market tested and certified that they do not exceed a
maximum aflatoxin tolerance. To comply with the standard, California
handlers arrange for a sample to be taken from each lot that is to be
shipped domestically and to have that sample tested for aflatoxin. Lots
that meet the standard receive written certifications that allow
shipment to the domestic market. Lots that exceed the aflatoxin
tolerance cannot be shipped domestically. Handlers may rework the lots
to remove contaminated nuts and then can begin the certification
process again. There are costs associated with each of these steps,
which are currently borne by California handlers and would be borne by
handlers in the other two States, if the order is amended.
Before considering cost-related details, it is important to examine
the benefits associated with mandatory aflatoxin certification. Various
grower and handler witnesses testified that they expected significant
benefits to accrue from the mandatory requirements enforced through the
marketing order, and increased consumer confidence in the quality of
U.S. pistachios. Arizona and New Mexico handler witnesses indicated
that they would willingly comply with all of the steps involved in
meeting the aflatoxin standards. Grower witnesses from Arizona and New
Mexico indicated awareness that at least part of the increased handler
costs from aflatoxin certification would be passed onto them, but that
they expected the net effect to be strongly positive. Grower witnesses
from Arizona and New Mexico also stated they did not expect to have to
undertake any significant changes in their pistachio production
operations as a result of coming under the authority of the marketing
order. Witnesses said that they believed that they would have overall
improved returns and higher sales than would be the case without the
marketing order regulation. They expected the benefits of the proposed
amendments to far outweigh the costs.
A 2005 benefit cost analysis of Federal marketing order mandatory
aflatoxin requirements for California was submitted as evidence at the
hearing. The analysis, prepared by agricultural economists at the
University of California-Davis, was entitled ``Economic Consequences of
Mandated Grading and Food Safety Assurance: Ex Ante Analysis of the
Federal Marketing Order for California Pistachios'' (Richard S. Gray
and others, University of California, Giannini Foundation Monograph 46,
March 2005). In present-value terms, over a 20-year horizon, the
benefits to producers in the study's baseline scenario were estimated
to be $75.3 million. The study reported a ``most likely scenario''
benefit cost ratio of nearly 6:1, with a range from about 4:1 to 9:1
under alternative scenarios representing low and high aflatoxin event
impacts, respectively, on the pistachio market.
One witness noted that, depending on compliance cost and aflatoxin
event assumptions under alternative scenarios in the study, the
expected benefit cost ratio from implementation of mandatory aflatoxin
standards under the California marketing order ranged between 5:1 and
17:1. Several grower and handler witnesses suggested that these
significant benefit cost ratios for the California marketing order
would also likely apply if the order were expanded to include Arizona
and New Mexico.
The following section examines the cost impacts of the mandatory
aflatoxin requirements in an expanded marketing order.
Differences in Aflatoxin Inspection and Certification Costs
Aflatoxin inspection and certification costs can be divided into
the costs of: (1) Inspector travel time to pistachio handler's
premises; (2) time required for the inspector to draw samples from lots
designated for domestic shipment; (3) cost of shipping samples to the
testing laboratory; (4) aflatoxin analysis (testing cost); and (5)
value of the destroyed pistachios used in the sampling and analysis.
Tables 1-3 that follow present estimated costs for representative
handlers in California, Arizona, and New Mexico. Each table is designed
to summarize handler costs for the lots being tested, including each of
the five cost elements listed above. For clarity of the cost
comparisons, the lot size to be sampled is assumed to be 50,000 pounds
in the representative scenarios for all three States. The 50,000-pound
lot size is most appropriate for California's handler plants, which are
generally larger than the handler plants in Arizona and New Mexico. The
impact in terms of higher unit cost for smaller lot sizes is discussed
below.
Table 1 is a representation of the current aflatoxin certification
cost situation in California, which is the production area of the
current Federal marketing order for pistachios. It serves as a
benchmark with which to compare the costs in the other two States,
Arizona and New Mexico, which would be included under the proposed
expanded production area. Witnesses from the pistachio industry in each
of the three States submitted as evidence the data used in the three
tables, and stated that the data was representative of the situation
that exists or would be faced by handlers in those States.
Witnesses pointed out that inspector travel costs and sample
shipment costs were the most variable costs across the States.
Inspector travel costs consist of the mileage reimbursement that
inspectors need to be paid by the handlers, plus the time spent
traveling to the handler's location. In California, inspectors are
regularly in the plants, and there is no additional travel time
associated with aflatoxin sampling. Witnesses testified that New Mexico
inspector travel costs could be as high as $485 per lot due to the
large distances involved, but that the figure of $432.50
[[Page 39233]]
was the most representative. Data presented at the hearing indicated
that Arizona inspector travel cost could be as high as $100 per lot,
but that a lower figure of $32.70 was more likely due to the closer
proximity of Arizona Plant Services inspectors, who may be certified to
take the sample.
Table 1--California Pistachios: Cost Scenario for Sampling and Aflatoxin
Testing for Representative Handler
------------------------------------------------------------------------
50,000-pound lots
---------------------- Description of cost
Dollars Dollars elements
per lot per pound
------------------------------------------------------------------------
Inspector Travel Time to ......... ......... No inspector travel
Plant. time; inspector
regularly in plant.
Inspector Sampling Time..... $70.00 $0.0014 [Cost of sampler
time: 2 hours) @
$35/hour = $70]; [2
hours to draw 100
samples for one lot
\2\].
Value of Pistachio Sample... $44.00 $0.0009 [10 kg (22-lb.)
weight of sample
from 100 sub-
samples]; [22 lbs.
@ $2.00 per pound =
$44].
Shipping Cost to Laboratory ......... ......... Onsite labs in
\1\. plants; no shipping
cost.
Aflatoxin Testing Cost \2\.. $90.00 $0.0018 $90 lab fee to
determine aflatoxin
level of sample.
�����������������������������
Total Cost.............. $204.00 $0.0041 ....................
�����������������������������
Pct. of price received by ......... 0.2% Industry estimate of
handler. CA handler sale
price per pound =
$2.00.
Pct. of price received by ......... 0.3% NASS estimate of
grower. 2007 CA grower
price per pound =
$1.35.
------------------------------------------------------------------------
\1\ DFA laboratory in Fresno, CA.
\2\ Aflatoxin analysis done in onsite laboratory; imputed cost of $90 is
based on cost in outside laboratory. Source: Testimony at pistachio
Federal marketing order hearing, July 29-30, 2008, in Fresno, CA.
Table 2--Arizona Pistachios: Cost Scenario for Sampling and Aflatoxin
Testing for Representative Handler
------------------------------------------------------------------------
50,000-pound lots
---------------------- Description of cost
Dollars Dollars elements
per lot per pound
------------------------------------------------------------------------
Inspector Travel Time to $32.70 $0.0007 [24 miles \1\ @
Plant. $0.40 per mile =
$9.60]; [Cost of
sampler time: 40
min. (0.66 hours) @
$35/hour = $23.10].
Inspector Sampling Time..... $70.00 $0.0014 [Cost of sampler
time: 2 hours @ $35/
hour = $70]; [2
hours to draw 100
samples for one lot
\2\].
Value of Pistachio Sample... $60.50 $0.0012 [10 kg (22-lb.)
weight of sample
from 100 sub-
samples]; [22 lbs.
@ $2.75 per pound =
$60.50].
Shipping Cost to Laboratory $200.00 $0.0040 Shipping cost per 10
\3\. kg sample.
Aflatoxin Testing Cost...... $90.00 $0.0018 $90 lab fee to
determine aflatoxin
level of sample.
----------------------
Total Cost.............. $453.20 $0.0091 ....................
�����������������������������
Pct. of price received by ......... 0.3% Industry estimate of
handler. AZ handler sale
price per pound =
$2.75.
Pct. of price received by ......... 0.7% USDA/NASS estimate
grower. of 2007 CA grower
price per pound =
$1.35 (AZ price not
available).
------------------------------------------------------------------------
\1\ 12 miles each way from pistachio handler plant in Bowie, AZ to the
San Simon, AZ location of Arizona Plant Services inspectors (certified
samplers).
\2\ Three lots sampled per visit over a 6-hour period.
\3\ DFA laboratory in Fresno, CA; handler witness expected to use
overnight shipping, estimated at $200 per 10 kg sample.
Source: Computed by USDA, based on evidence presented at pistachio
Federal marketing order hearing, July 29-30, 2008, in Fresno, CA.
Table 3--New Mexico Pistachios: Cost Scenario for Sampling and Aflatoxin
Testing for Representative Handler
------------------------------------------------------------------------
50,000-pound lots
---------------------- Description of cost
Dollars Dollars elements
per lot per pound
------------------------------------------------------------------------
Inspector Travel Time to $432.50 $0.0087 [600 miles \1\ @
Plant. $0.40 per mile =
$240]; [Cost of
sampler time: 5.5
hours \2\ @ $35/
hour = $192.50].
Inspector Sampling Time..... $70.00 $0.0014 [Cost of sampler
time: 2 hours @ $35/
hour = $70]; [2
hours to draw 100
samples for one
lot].
[[Page 39234]]
Value of Pistachio Sample... $44.00 $0.0009 [10 kg (22-lb.)
weight of sample
from 100 sub-
samples]; [22 lbs.
@ $2.00 per pound =
$44].
Shipping Cost to Laboratory $105.00 $0.0021 Shipping cost per 10
\3\. kg sample \4\.
Aflatoxin Testing Cost...... $90.00 $0.0018 $90 lab fee to
determine aflatoxin
level of sample.
----------------------
Total Cost.............. $741.50 $0.0148 ....................
�����������������������������
Pct. of price received by ......... 0.7% Industry estimate of
handler. NM handler sale
price per pound =
$2.00.
Pct. of price received by ......... 1.1% USDA/NASS estimate
grower. of 2007 CA grower
price per pound =
$1.35 (NM price not
available).
------------------------------------------------------------------------
\1\ Average of round trip travel distances to Alamagordo, NM, pistachio
handler plant from two NM inspector (certified sampler) locations--
Portales (416 miles round trip) and Farmington (782 miles).
\2\ Average of driving time estimates to two inspector locations: (4 +
7) / 2 = 5.5 hours.
\3\ DFA laboratory in Fresno, CA.
\4\ Average of estimated range of shipping costs = ($90 + $120) / 2 =
$105.
Source: Computed by USDA, based on evidence presented at pistachio
Federal marketing order hearing, July 29-30, 2008, in Fresno, CA.
Two cost elements that are uniform across the three States are
sampling time and testing cost. The estimated time that it takes an
inspector to draw a 10 kg (22 pound) sample for aflatoxin testing of a
50,000 pound lot, based on 100 sub-samples, is 2 hours. At a standard
hourly rate of $35 per hour, two hours of sampling time will cost the
handler $70. The testing cost for a laboratory to determine the
aflatoxin level from a sample is $90.
Witnesses indicated that the cost for the 22 pounds of pistachios
used in the sample (handler sales revenue foregone) was $2.00 per pound
($44 total) in California and New Mexico and $2.75 in Arizona (about
$61 total).
Given all of the assumptions that went into developing the cost
summary in Table 1, the estimated cost per lot for a California handler
for aflatoxin certification is $204, which is less than one half cent
per pound (about four tenths of a cent). This represents 0.2 percent of
the $2.00 pistachio value per pound at the handler level (estimate
provided by industry witnesses) and 0.3 percent of the 2007 grower
price per pound for California pistachios, estimated by NASS at $1.35
per pound. A California pistachio industry witness pointed out that the
unit price would be even lower with larger lot sizes and that the
average lot size for ``failed lots'' in a recent year under the
marketing order (those that exceeded the maximum aflatoxin tolerance)
was nearly 67,000 pounds.
Table 2 shows that a representative Arizona handler would pay twice
as much as a California handler--$453 per lot, or nearly one cent per
pound (about nine tenths of a cent). The data in Table 3 indicated that
a New Mexico handler would pay even more for aflatoxin certification--
$742 per 50,000 pound lot, or about 1.5 cents per pound. Thus the
certification costs for the smaller plants in Arizona and New Mexico
would be between two and four times higher, if lot sizes were the same.
Typical lot sizes may be smaller in Arizona and New Mexico;
witnesses indicated that lot sizes could vary between 10,000 and 50,000
pounds. An Arizona handler witness presented evidence indicating that
40,000 pounds would be a more likely typical lot size, and that the
sample size and related cost factors would be the same. With a smaller
lot size, the Arizona handler cost per pound rises from nine tenths of
a cent (50,000 pound lot) to 1.1 cents (40,000 pound lot). This cost
per pound is nearly 3 times higher than the cost for a California
handler with a 50,000 pound lot, but the percentage of the estimated
handler sales price remains under one half of one percent (0.4%).
A New Mexico handler witness characterized their own operation as
being quite a bit smaller than the main Arizona handler and most
California handlers. If the typical lot size for a small New Mexico
handler was 10,000 pounds, then the sample size would be smaller (13.2
pounds) and the inspector sampling time declines from two hours to one
hour. The total cost would decline modestly, from $742 for a 50,000
pound lot to $689 for a 10,000 pound lot. However, since the costs are
spread over fewer pounds, the unit cost for certification would rise to
nearly seven cents per pound, about 3 percent of the handler sales
price. If the small handler had a typical lot size of 30,000 pounds
(the midpoint between 10,000 and 50,000 pounds) the certification cost
would be about 2.5 cents per pound, just over one percent of the
handler sale price.
However, the New Mexico handler witness indicated that they would
try to organize their pistachio handling operation to keep the lot
sizes for sampling and testing large enough to keep costs down. The
50,000 pound lot example shown in Table 3 therefore provides a
reasonable representation of small handler certification costs. The
higher costs are due largely to the less developed aflatoxin testing
infrastructure than is available in California, and related issues such
as greater distances for inspector travel.
Additional costs are incurred if a lot exceeds the maximum
aflatoxin tolerance. Witnesses estimated that in all three States the
cost for reworking a lot to remove the contaminated nuts would be 25
cents per pound. After reworking the lot a handler would incur another
round of the sampling and testing costs highlighted in the tables.
Grower witnesses stated that the aflatoxin certification costs as
presented by handler and other industry witnesses, and illustrated by
the three tables, appeared to be reasonable representations of the cost
of compliance with the aflatoxin requirements under the marketing
order.
Proposed Reimbursement To Account for Handler Cost Differences
The significant cost differences highlighted above is the reason
that
[[Page 39235]]
pistachio industry witnesses from all three States supported a proposed
amendment to authorize the Committee to reimburse handlers in more
remote locations within the production area for the excess costs due to
lack of access to inspection and certification services. Reimbursing
handlers for the excess costs would eliminate any differential impact
and would equalize the aflatoxin certification costs across the
proposed expanded production area.
Although the precise details of reimbursement would be established
through the informal rulemaking process upon recommendation of the
Committee if such authority were granted, the following example
illustrates one way to estimate the amount of reimbursement that may
occur. With a 50,000 pound lot size, Table 3 shows the cost per lot for
a New Mexico handler is about $742. The New Mexico handler would be
expected to pay only the portion of the costs that are the same across
the three States ($70 for inspector sampling, plus $90 testing cost,
plus $44 in revenue foregone from destroyed pistachios, for a total
cost per lot of $204). The handler represented by Table 3 would receive
a reimbursement per lot of $538 ($742 minus $204).
Using different cost assumptions, a pistachio industry witness
provided an example with a somewhat higher estimate of the likely cost
($605 per lot) that the Committee would reimburse New Mexico handlers.
The witness estimated that with ten sampling trips per year, and one
lot sampled per trip, the New Mexico reimbursements would total $6,050.
With an anticipated total of 100 lots tested in Arizona in the example
presented by the witness, and with a reimbursement rate of $235 per
lot, the total Arizona cost would be $23,500. The sum for the two
States would be about $30,000.
Based on similar assumptions used in developing the tables, the
total current cost of marketing order aflatoxin certification for
California handlers (excluding the Committee assessment) was estimated
by an industry witness to be $530,000. Based on this example, a $30,000
reimbursement would be issued by the Committee to the Arizona and New
Mexico handlers. The reimbursement would represent about a 6 percent
increase above the $530,000 currently paid by the California handlers.
The witness also stated that when the reimbursement system is
implemented, all handlers of like-size operations would have comparable
inspection costs.
All California handler and grower witnesses expressed their support
for such a reimbursement provision. In addition, all of the Arizona and
New Mexico handler and grower witnesses also testified in favor of such
a reimbursement.
Handler and grower witnesses indicated that the expected benefits
from the operation of the expanded marketing order would substantially
exceed costs.
Other Proposed Amendments
The addition of production, post harvest, and nutrition research
authority to the order would have no immediate cost impact on the
industry. If the proposal is adopted, it would allow the Committee to
recommend research activities to USDA. If approved, the projects would
be funded through handler assessments. It is likely that program
assessments would increase in order to fund any projects recommended,
which would increase costs to handlers. However, the order limits the
total assessment that can be implemented under the order so that the
entire assessment cannot exceed one half of one percent of the average
price received by producers in the preceding crop year. To the extent
that funds for research would only represent a portion of the
assessment funds, the cost of any research that may be conducted would
necessarily be less than one half of one percent of the average price
received by producers. In addition, since assessments are collected
from handlers based on the volume of pistachios handled, any cost
associated with research projects would be proportionate to the size of
the handlers.
Witnesses testified that the Committee would not undertake any
research activities unless they expected the benefits to outweigh the
costs. One witness testified that a presentation at a Symposium for
Agricultural Research held on June 18 and 19, 2008, in Sacramento,
California indicated that a benefit/cost ratio for agricultural
research in California has been estimated at 30.7 to 1.
Handler and grower witnesses made positive comments in support of
other proposed order amendments, including the granting of broad
authority for aflatoxin standards and for other quality regulations.
Witnesses stated that there would be no immediate impact from the
granting of these authorities, because there are no industry plans for
changes in regulations. However, handler and grower witnesses stated
that having such authority would be quite helpful to the future of the
pistachio industry, and that if the authorities were exercised in the
future, they expected that it would be done in a way that assured that
benefits would outweigh costs. Since unanimity of the Committee would
generally be required to make such changes, they expressed confidence
that only regulations would be established that had very broad industry
consensus. They expected additional improvements in product quality and
improved returns to growers and handlers from the use of any such
future regulations.
One other proposed amendment, relating to interhandler transfers,
merits discussion in the context of economic impact on handlers and
growers, particularly small ones. When the marketing order was
promulgated in 2004, authority was given for interhandler transfers of
noncertified pistachios. Evidence presented at the hearing indicates
that the proposed amendment formalizes that authority and expands it to
include other marketing order requirements, including the payment of
assessments on hulled and dried pistachios, when that processing is
done by the producer. Under the marketing order, the entity which hulls
and dries pistachios is responsible for assessments and inspections.
This provision was included because in California producers normally
deliver pistachios to a handler (processor) for hulling and drying as
well as the subsequent handling functions.
However, conditions in Arizona and New Mexico are different due to
the limited processing capacity of some handlers, the lack of
processing access of producers, and the small size of some producing
operations. It is necessary in these conditions for some producers to
process (hull and dry) their pistachios prior to delivery to a handler.
The hulling and drying is part of the harvest process, and it is not
the intent of these producers to perform any other handling functions.
The proposal would therefore allow the transfer of responsibility for
assessments, inspections and other marketing order requirements to the
handler who places the pistachios into the stream of commerce.
According to evidence presented at the hearing, this amendment
would allow a small number of producers who hull and dry their own
production, but perform no additional handling functions (estimated at
less than ten), to limit their responsibility to filing a form at the
time of pistachio delivery. This proposal would more clearly delineate
the responsibilities of handlers and the small number of affected
producers. Both would continue their current practices in virtually all
cases, and the proposal would neither increase nor decrease returns. If
the proposal is not accepted, small grower/handlers would
[[Page 39236]]
assume an additional paperwork burden associated with the role of a
handler, according to testimony. This proposal has the effect of
assisting small business operations by removing them from paperwork and
other burdens.
Handler Assessment Costs
Under the marketing order, handlers pay assessments to the
Committee for costs associated with administering the program.
Following is an evaluation of the impact these costs would have on
handlers in Arizona and New Mexico if they are included under the
order.
The assessment rate authorized under the order is limited to one-
half of one percent (.005) of the average grower price received in the
preceding crop year. The current assessment rate under the order is
$.0007 per pound, or .07 cents per pound. This compares to an estimated
average grower price for the 2007 crop year of $1.35 per pound. The
assessment rate for the 2007 crop year was .05 percent (5/100ths of one
percent) of the grower price.
Although there are no NASS data available regarding New Mexico
pistachio production, information presented by witnesses at the hearing
indicates average annual production in New Mexico could be in the range
of 300,000 to 350,000 pounds. At an assessment rate of $.0007, this
would equate to a total annual assessment ranging from $210 to $245 for
all New Mexico handlers combined. Production from Arizona was 7 million
pounds in 2007, according to NASS data. At the $.0007 per pound
assessment rate, this would equate to a total annual assessment of
$4,900 for all Arizona handlers combined. Assessments under the order
present a cost to handlers, but as can be seen from the foregoing
example, the cost is minimal. In addition, the costs are applied to
handlers in proportion to the quantity of pistachios handled, so there
is no differential impact anticipated for small and large handlers.
Paperwork Reduction Act
Information collection requirements for Part 983 are currently
approved by the Office of Management and Budget (OMB) under OMB No.
0581-0215, ``Pistachios Grown in California.'' The information
requirements generated by the proposed amendments would result in an
increase in burden, which has been submitted to OMB for approval under
OMB No. 0581-NEW. Upon approval, we will request that this collection
be merged into OMB No. 0581-0215.
The estimated burden is as follows:
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average .225 hours per response.
Respondents: Producers and handlers of pistachios grown in Arizona
and New Mexico.
Estimated Number of Respondents: 85.
Estimated Number of Responses per Respondent: 1.51.
Estimated Total Annual Burden on Respondents: 29 hours.
The Recommended Decision provided an opportunity to submit comments
on the proposed information collection requirements. None were
received.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. USDA has not
identified any relevant Federal rules that duplicate, overlap or
conflict with this proposed rule. All of these amendments are designed
to enhance the administration and functioning of the marketing order to
the benefit of the industry.
While the implementation of these requirements may impose some
additional costs on handlers, the costs are minimal and uniform on all
handlers. Some of these costs may be passed on to growers. However,
these costs would be offset by the benefits derived by the operation of
the marketing order. In addition, the meetings regarding these
proposals as well as the hearing date were widely publicized throughout
the existing and proposed addition to the pistachio production area and
all interested persons were invited to attend the meetings and the
hearing and participate in Committee deliberations on all issues. All
Committee meetings and the hearing were public forums and all entities,
both large and small, were able to express views on these issues. The
Committee itself is composed of members representing handlers and
producers. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
AMS is committed to complying with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Civil Justice Reform
The amendments to Marketing Agreement and Order 983 proposed herein
have been reviewed under Executive Order 12988, Civil Justice Reform.
They are not intended to have retroactive effect. If adopted, the
proposed amendments would not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this proposal.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United Sates in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed no later than 20 days after the date of the
entry of the ruling.
Findings and Conclusions
The findings and conclusions, rulings, and general findings and
determinations included in the Recommended Decision set forth in the
May 5, 2009, (74 FR 20630) issue of the Federal Register are hereby
approved and adopted.
Marketing Agreement and Order
Annexed hereto and made a part hereof is the document entitled
``Order Amending the Order Regulating the Handling of Pistachios Grown
in California, Arizona, and New Mexico.'' This document has been
decided upon as the detailed and appropriate means of effectuating the
foregoing findings and conclusions.
It is hereby ordered, that this entire decision be published in the
Federal Register.
Referendum Order
It is hereby directed that a referendum be conducted in accordance
with the procedure for the conduct of referenda (7 CFR part 900.400-
407) to determine whether the annexed order amending the order
regulating the handling of pistachios grown in California, Arizona, and
New Mexico is approved or favored
[[Page 39237]]
by producers, as defined under the terms of the order, who during the
representative period were engaged in the production of pistachios in
the production area (California, Arizona, and New Mexico).
The representative period for the conduct of such referendum is
hereby determined to be September 1, 2008 through July 31, 2009.
The agents of the Secretary to conduct such referendum are hereby
designated to be Kurt Kimmel and Jennifer Robinson, California
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax (559)
487-5906, or e-mail: [email protected] or
[email protected], respectively.
List of Subjects in 7 CFR Part 983
Pistachios, Marketing agreements and orders, Reporting and
recordkeeping requirements.
Dated: July 29, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
Order Amending the Order Regulating the Handling of Pistachios Grown in
California, Arizona, and New Mexico \1\
Findings and Determinations
The findings and determinations hereinafter set forth are
supplementary to the findings and determinations that were previously
made in connection with the issuance of the marketing order; and all
said previous findings and determinations are hereby ratified and
affirmed, except insofar as such findings and determinations may be in
conflict with the findings and determinations set forth herein.
---------------------------------------------------------------------------
\1\ This order shall not become effective unless and until the
requirements of Sec. 900.14 of the rules of practice and procedure
governing proceedings to formulate marketing agreements and
marketing orders have been met.
---------------------------------------------------------------------------
(a) Findings and Determinations Upon the Basis of the Hearing Record
Pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended, (7 U.S.C. 601-612), and the applicable rules
of practice and procedure effective thereunder (7 CFR part 900), a
public hearing was held upon proposed further amendment of Marketing
Agreement and Order No. 983, regulating the handling of pistachios
grown in California. Upon the basis of the evidence introduced at such
hearing and the record thereof, it is found that:
(1) The marketing agreement and order, and as hereby proposed to be
amended, and all of the terms and conditions thereof, would tend to
effectuate the declared policy of the Act;
(2) The marketing agreement and order, as hereby proposed to be
amended, regulate the handling of pistachios grown in the production
area in the same manner as, and are applicable only to, persons in the
respective classes of commercial and industrial activity specified in
the marketing agreement and order upon which a hearing has been held;
(3) The marketing agreement and order, as hereby proposed to be
amended, are limited in their application to the smallest regional
production area which is practicable, consistent with carrying out the
declared policy of the Act, and the issuance of several orders
applicable to subdivisions of the production area would not effectively
carry out the declared policy of the Act;
(4) The marketing agreement and order, as hereby proposed to be
amended, prescribe, insofar as practicable, such different terms
applicable to different parts of the production area as are necessary
to give due recognition to the differences in the production and
marketing of pistachios grown in the production area; and
(5) All handling of pistachios grown in the production area as
defined in the marketing agreement and order, is in the current of
interstate or foreign commerce or directly burdens, obstructs, or
affects such commerce.
Order Relative to Handling
It is therefore ordered, That on and after the effective date
hereof, all handling of pistachios grown in California, Arizona, and
New Mexico shall be in conformity to, and in compliance with the terms
and conditions of the said order as hereby proposed to be amended as
follows:
The provisions of the proposed marketing agreement and order
amending the order contained in the Recommended Decision issued on
April 29, 2009, and published in the Federal Register on May 5, 2009,
(74 FR 20630) will be and are the terms and provisions of this order
amending the order and are set forth in full below.
PART 983--[AMENDED]
1. The authority citation for 7 CFR part 983 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. The heading for part 983 is revised to read as follows:
PART 983--PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, AND NEW MEXICO
3. Revise Sec. 983.1 to read as follows:
Sec. 983.1 Accredited laboratory.
An accredited laboratory is a laboratory that has been approved or
accredited by the U.S. Department of Agriculture.
4. Lift suspension of Sec. 983.6, published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007 and revise the section
to read as follows:
Sec. 983.6 Assessed weight.
Assessed weight means pounds of inshell pistachios, with the weight
computed at 5 percent moisture, received for processing by a handler
within each production year: Provided, That for loose kernels, the
actual weight shall be multiplied by two to obtain an inshell weight;
Provided further, That the assessed weight may be based upon quality
requirements for inshell pistachios that may be recommended by the
Committee and approved by the Secretary.
5. Lift suspension of Sec. 983.7 published on December 7, 2007 (72
FR 69141) and effective on December 10, 2007, and revise the section to
read as follows:
Sec. 983.7 Certified pistachios.
Certified pistachios are those that meet the inspection and
certification requirements under this part.
6. Revise Sec. 983.8 to read as follows:
Sec. 983.8 Committee.
Committee means the Administrative Committee for Pistachios
established pursuant to Sec. 983.41.
Sec. 983.11 [Amended]
7. Amend Sec. 983.11 by adding a paragraph (a)(4) to read as
follows:
Sec. 983.11 Districts.
(a) * * *
(4) District 4 consists of the States of Arizona and New Mexico.
* * * * *
Sec. 983.19 [Removed and Reserved]
8. Lift suspension of Sec. 983.19 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, and remove the
section.
Sec. 983.20 [Removed and Reserved]
9. Lift suspension of Sec. 983.20 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, and remove the
section.
[[Page 39238]]
Sec. 983.21 [Redesignated as Sec. 983.20]
10. Redesignate Sec. 983.21 as Sec. 983.20, and revise it to read
as follows:
Sec. 983.20 Part and subpart.
Part means the order regulating the handling of pistachios grown in
the States of California, Arizona and New Mexico, and all the rules,
regulations and supplementary orders issued thereunder. The aforesaid
order regulating the handling of pistachios grown in California,
Arizona and New Mexico shall be a subpart of such part.
Sec. 983.22 [Redesignated as Sec. 983.21]
11. Redesignate Sec. 983.22 as Sec. 983.21.
Sec. 983.23 [Redesignated as Sec. 983.22]
12. Redesignate Sec. 983.23 as Sec. 983.22, and revise it to read
as follows:
Sec. 983.22 Pistachios.
Pistachios means the nuts of the pistachio tree of the genus and
species Pistacia vera grown in the production area, whether inshell or
shelled.
Sec. 983.24 [Redesignated as Sec. 983.23]
13. Redesignate Sec. 983.24 as Sec. 983.23.
Sec. 983.25 [Redesignated as Sec. 983.24]
14. Redesignate Sec. 983.25 as Sec. 983.24.
Sec. 983.26 [Redesignated as Sec. 983.25]
15. Redesignate Sec. 983.26 as Sec. 983.25, and revise it to read
as follows:
Sec. 983.25 Production area.
Production Area means the States of California, Arizona, and New
Mexico.
Sec. Sec. 983.27 through 983.30 [Redesignated as Sec. Sec. 983.26
through 983.29]
16. Redesignate Sec. Sec. 983.27 through 983.30 as Sec. Sec.
983.26 through 983.29, respectively.
Sec. 983.31 [Redesignated as Sec. 983.30]
17. Lift suspension of Sec. 983.31 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, redesignate Sec.
983.31 as Sec. 983.30, and revise the section to read as follows:
Sec. 983.30 Substandard pistachios.
Substandard pistachios means pistachios, inshell or shelled, which
do not meet regulations established pursuant to Sec. Sec. 983.50 and
983.51.
Sec. 983.53 [Redesignated as Sec. 983.71]
18. Redesignate Sec. 983.53 as Sec. 983.71, and revise paragraph
(a) to read as follows:
Sec. 983.71 Assessments.
(a) Each handler who receives pistachios for processing in each
production year, except as provided in Sec. 983.58, shall pay the
committee on demand, an assessment based on the pro rata share of the
expenses authorized by the Secretary for that year attributable to the
assessed weight of pistachios received by that handler in that year.
* * * * *
Sec. 983.54 [Redesignated as Sec. 983.72]
19. Redesignate Sec. 983.54 as Sec. 983.72, and revise the
section to read as follows:
Sec. 983.72 Contributions.
The committee may accept voluntary contributions but these shall
only be used to pay for committee expenses unless specified in support
of research under Sec. 983.46. Furthermore, research contributions
shall be free of additional encumbrances by the donor and the committee
shall retain complete control of their use.
Sec. 983.55 [Redesignated as Sec. 983.73]
20. Redesignate Sec. 983.55 as Sec. 983.73.
Sec. 983.56 [Redesignated as Sec. 983.74]
21. Redesignate Sec. 983.56 as Sec. 983.74, and amend it by
removing the reference to ``Sec. 983.53'' and adding in its place
``Sec. 983.71'' in paragraph (a)(1).
Sec. 983.57 [Redesignated as Sec. 983.75]
22. Redesignate Sec. 983.57 as Sec. 983.75, and revise it to read
as follows:
Sec. 983.75 Implementation and amendments.
The Secretary, upon the recommendation of a majority of the
committee, may issue rules and regulations implementing or modifying
Sec. Sec. 983.64 through 983.74 inclusive.
Sec. Sec. 983.58 through 983.64 [Redesignated as Sec. Sec. 983.80
through 983.86]
23. Redesignate Sec. Sec. 983.58 through 983.64 as Sec. Sec.
983.80 through 983.86, respectively.
24. Move the undesignated center heading ``MISCELLANEOUS
PROVISIONS'' to precede Sec. 983.80.
Sec. 983.65 [Redesignated as Sec. 983.87]
25. Redesignate Sec. 983.65 as Sec. 983.87, and revise it to read
as follows:
Sec. 983.87 Effective time.
The provisions of this part, as well as any amendments, shall
become effective at such time as the Secretary may declare, and shall
continue in force until terminated or suspended in one of the ways
specified in Sec. 983.88 or Sec. 983.89.
Sec. Sec. 983.66 through 983.69 [Redesignated as Sec. Sec. 983.88
through 983.91]
26. Redesignate Sec. Sec. 983.66 through 983.69 as Sec. Sec.
983.88 through 983.91, respectively.
Sec. 983.70 [Redesignated as Sec. 983.92]
27. Redesignate Sec. 983.70 as Sec. 983.92, and revise it to read
as follows:
Sec. 983.92 Exemption.
Any handler may handle pistachios within the production area free
of the requirements in Sec. Sec. 983.50 through 983.58 and Sec.
983.71 if such pistachios are handled in quantities not exceeding 5,000
dried pounds during any production year. The Secretary, upon
recommendation of the committee, may issue rules and regulations
changing the 5,000 pound quantity applicable to this exemption.
Sec. 983.41 [Redesignated]
28. Lift suspension of Sec. 983.41 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, redesignate Sec.
983.41 as Sec. 983.53, and revise the section to read as follows:
Sec. 983.53 Testing of minimal quantities.
(a) Aflatoxin. Handlers who handle less than 1 million pounds of
assessed weight per year have the option of utilizing both of the
following methods for testing for aflatoxin:
(1) The handler may have an inspector sample and test his or her
entire inventory of hulled and dried pistachios for the aflatoxin
certification before further processing.
(2) The handler may segregate receipts into various lots at the
handler's discretion and have an inspector sample and test each
specific lot. Any lots that are found to have less aflatoxin than the
level established by the committee and approved by the Secretary can be
certified by an inspector to be negative as to aflatoxin. Any lots that
are found to have aflatoxin exceeding the level established by the
committee and approved by the Secretary may be tested after reworking
in the same manner as specified in Sec. 983.50.
(b) Quality. The committee may, with the approval of the Secretary,
establish regulations regarding the testing of minimal quantities of
pistachios for quality.
Sec. 983.42 [Redesignated as Sec. 983.54]
29. Lift suspension of Sec. 983.42 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, redesignate Sec.
983.42 as Sec. 983.54, and revise the section to read as follows:
Sec. 983.54 Commingling.
Certified lots may be commingled with other certified lots, but the
commingling of certified and uncertified lots shall cause the loss of
certification for the commingled lots.
[[Page 39239]]
Sec. 983.43 [Redesignated as Sec. 983.55]
30. Redesignate Sec. 983.43 as Sec. 983.55.
Sec. 983.44 [Redesignated as Sec. 983.56]
31. Redesignate Sec. 983.44 as Sec. 983.56, and revise it to read
as follows:
Sec. 983.56 Inspection, certification and identification.
Upon recommendation of the committee and approval of the Secretary,
all pistachios that are required to be inspected and certified in
accordance with this part shall be identified by appropriate seals,
stamps, tags, or other identification to be affixed to the containers
by the handler. All inspections shall be at the expense of the handler,
Provided, That for handlers making shipments from facilities located in
an area where inspection costs for inspector travel and shipment of
samples for aflatoxin testing would otherwise exceed the average of
those same inspection costs for comparable handling operations located
in Districts 1 and 2, such handlers may be reimbursed by the committee
for the difference between their respective inspection costs and such
average, or as otherwise recommended by the committee and approved by
the Secretary.
Sec. 983.45 [Redesignated as Sec. 983.57]
32. Lift the suspension of Sec. 983.45 published on December 7,
2007 (72 FR 69141) and effective on December 10, 2007, redesignate
Sec. 983.45 as Sec. 983.57, and revise the section to read as
follows:
Sec. 983.57 Substandard pistachios.
The committee shall, with the approval of the Secretary, establish
such reporting and disposition procedures as it deems necessary to
ensure that pistachios which do not meet the aflatoxin and quality
requirements established pursuant to Sec. Sec. 983.50 and 983.51 shall
not be shipped for domestic human consumption.
Sec. 983.46 [Redesignated as Sec. 983.59]
33. Redesignate Sec. 983.46 as Sec. 983.59, and revise it to read
as follows:
Sec. 983.59 Modification or suspension of regulations.
(a) In the event that the committee, at any time, finds that by
reason of changed conditions, any regulations issued pursuant to
Sec. Sec. 983.50 through 983.58 should be modified or suspended, it
shall, pursuant to Sec. 983.43, so recommend to the Secretary.
(b) Whenever the Secretary finds from the recommendations and
information submitted by the committee or from other available
information, that a regulation should be modified, suspended, or
terminated with respect to any or all shipments of pistachios in order
to effectuate the declared policy of the Act, the Secretary shall
modify or suspend such provisions. If the Secretary finds that a
regulation obstructs or does not tend to effectuate the declared policy
of the Act, the Secretary shall suspend or terminate such regulation.
(c) The Secretary, upon recommendation of the committee, may issue
rules and regulations implementing Sec. Sec. 983.50 through 983.58.
Sec. Sec. 983.47 through 983.51 [Redesignated as Sec. Sec. 983.64
through 983.68]
34. Redesignate Sec. Sec. 983.47 through 983.51 as Sec. Sec.
983.64 through 983.68, respectively.
35. Move the undesignated center heading ``REPORTS, BOOKS, AND
RECORDS'' to precede Sec. 983.64.
Sec. 983.52 [Redesignated as Sec. 983.70]
36. Redesignate Sec. 983.52 as Sec. 983.70.
37. Move the undesignated center heading ``EXPENSES AND
ASSESSMENTS'' to precede Sec. 983.70.
38. Add a new Sec. 983.58 to read as follows:
Sec. 983.58 Interhandler transfers.
Within the production area, any handler may transfer pistachios to
another handler for additional handling, and any assessments,
inspection requirements, aflatoxin testing requirements, and any other
marketing order requirements with respect to pistachios so transferred
may be assumed by the receiving handler. The committee, with the
approval of the Secretary, may establish methods and procedures,
including necessary reports, to maintain accurate records for such
transfers.
Sec. 983.32 [Redesignated as Sec. 983.41]
39. Redesignate Sec. 983.32 as Sec. 983.41, amend the section by
removing the words ``eleven (11)'' from the introductory paragraph and
adding in their place the words ``twelve (12),'' and by revising
paragraph (b) to read as follows:
Sec. 983.41 Establishment and membership.
(a) * * *
(b) Producers. Nine members shall represent producers. Producers
within the respective districts shall nominate four producers from
District 1, three producers from District 2, one producer from District
3, and one producer from District 4. The Secretary, upon recommendation
of the committee, may reapportion producer representation among the
districts to ensure proper representation.
* * * * *
Sec. 983.33 [Redesignated as Sec. 983.42]
40. Redesignate Sec. 983.33 as Sec. 983.42, and amend the section
by removing the word ``grower'' and adding in its place the word
``producer'' in paragraph (a), removing the reference to ``Sec.
983.32'' and adding in its place ``Sec. 983.41'' in paragraph (j), and
by removing the reference to ``Sec. Sec. 983.32, 983.33, and 983.34''
and adding in its place ``Sec. Sec. 983.41, 983.42, and 983.43'' in
paragraph (n).
Sec. 983.34 [Redesignated as Sec. 983.43]
41. Redesignate Sec. 983.34 as Sec. 983.43, and revise paragraph
(a) of that section to read as follows:
Sec. 983.43 Procedure.
(a) Quorum. A quorum of the committee shall be any seven voting
committee members. The vote of a majority of members present at a
meeting at which there is a quorum shall constitute the act of the
committee: Provided, That:
(1) Actions of the committee with respect to the following issues
shall require twelve (12) concurring votes of the voting members
regarding any recommendation to the Secretary for adoption or change
in:
(i) Quality regulation;
(ii) Aflatoxin regulation;
(iii) Research under Sec. 983.46; and
(2) Actions of the committee with respect to the following issues
shall require eight (8) concurring votes of the voting members
regarding recommendation to the Secretary for adoption or change in:
(i) Inspection programs;
(ii) The establishment of the committee.
* * * * *
Sec. 983.35 [Redesignated as Sec. 983.44]
42. Redesignate Sec. 983.35 as Sec. 983.44.
Sec. 983.36 [Redesignated as Sec. 983.45]
43. Redesignate Sec. 983.36 as Sec. 983.45.
Sec. 983.37 [Redesignated as Sec. 983.47]
44. Redesignate Sec. 983.37 as Sec. 983.47.
45. Move the undesignated center heading ``MARKETING POLICY'' to
precede Sec. 983.47.
Sec. 983.38 [Redesignated as Sec. 983.50]
46. Lift the suspension of Sec. 983.38 published on December 7,
2007 (72 FR 69141) and effective on December 10, 2007, redesignate
Sec. 983.38 as Sec. 983.50, and revise the section to read as
follows:
[[Page 39240]]
Sec. 983.50 Aflatoxin regulations.
The committee shall establish, with the approval of the Secretary,
such aflatoxin sampling, analysis, and inspection requirements
applicable to pistachios to be shipped for domestic human consumption
as will contribute to orderly marketing or be in the public interest.
No handler shall ship, for human consumption, pistachios that exceed an
aflatoxin level established by the committee with approval of the
Secretary. All domestic shipments must be covered by an aflatoxin
inspection certificate.
47. Move the undesignated center heading ``REGULATIONS'' to precede
Sec. 983.50.
Sec. 983.39 [Redesignated as Sec. 983.51]
48. Lift suspension of Sec. 983.39 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, redesignate Sec.
983.39 as Sec. 983.51, and revise the section to read as follows:
Sec. 983.51 Quality regulations.
For any production year, the committee may establish, with the
approval of the Secretary, such quality and inspection requirements
applicable to pistachios to be shipped for domestic human consumption
as will contribute to orderly marketing or be in the public interest.
In such production year, no handler shall ship pistachios for domestic
human consumption unless they meet the applicable requirements as
evidenced by certification acceptable to the committee.
Sec. 983.40 [Redesignated as Sec. 983.52]
49. Lift suspension of Sec. 983.40 published on December 7, 2007
(72 FR 69141) and effective on December 10, 2007, redesignate Sec.
983.40 as Sec. 983.52, and revise the section to read as follows:
Sec. 983.52 Failed lots/rework procedure.
(a) Substandard pistachios. Each lot of substandard pistachios may
be reworked to meet aflatoxin or quality requirements. The committee
may establish, with the Secretary's approval, appropriate rework
procedures.
(b) Failed lot reporting. If a lot fails to meet the aflatoxin and/
or the quality requirements of this part, a failed lot notification
report shall be completed and sent to the committee within 10 working
days of the test failure. This form must be completed and submitted to
the committee each time a lot fails either aflatoxin or quality
testing. The accredited laboratories shall send the failed lot
notification reports for aflatoxin tests to the committee, and the
handler, under the supervision of an inspector, shall send the failed
lot notification reports for the lots that do not meet the quality
requirements to the committee.
50. Add a new Sec. 983.46, preceded by an undesignated center
heading, to read as follows:
Research
Sec. 983.46 Research.
The committee, with the approval of the Secretary, may establish or
provide for the establishment of projects involving research designed
to assist or improve the efficient production and postharvest handling
of quality pistachios. The committee, with the approval of the
Secretary, may also establish or provide for the establishment of
projects designed to determine the effects of pistachio consumption on
human health and nutrition. Pursuant to Sec. 983.43(a), such research
projects may only be established with 12 concurring votes of the voting
members of the committee. The expenses of such projects shall be paid
from funds collected pursuant to Sec. Sec. 983.71 and 983.72.
[FR Doc. E9-18538 Filed 8-5-09; 8:45 am]
BILLING CODE 3410-02-P